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Scott Shreeve, MD

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I'm the CEO of Crossover Health, a patient-centered, membership-based medical group that is redesigning the practice, delivery, and experience of health care. We offer urgent, primary, and online care to our members who can access our technology platform, practice model, and provider network from anywhere and anytime to optimize their health. Email Me



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Transparency and Rational Healthcare Decision Making

Grievance (grē’vəns) n.

1. An actual or supposed circumstance regarded as just cause for complaint.
2. A complaint or protestation based on such a circumstance.
3. Indignation or resentment stemming from a feeling of having been wronged.

In 2007 it is clear that I am going to have some real world opportunities to test out the new concepts and value added advisory services made available through the new paradigm of Health 2.0. While we are fortunate to enjoy excellent health, we will have several medical procedures this year.

My first foray into the healthcare system began last week as I was attempting to schedule an outpatient ultrasound for a family member. After dropping my initials to bypass the normal administrative barriers, I was able to speak with the billing specialist with the radiology group, and the reimbursement specialist with my insurance group. After about 2.5 hours of various calls, questions, verification, and additional questions, I was able to obtain about 75% of the information I needed to make a rational healthcare choice between two facilities who could provide the service. Unfortunately, my insurance plan refused to provide the facility charge information and would not explain why. I was instructed to write a letter to the “Grievance” Department. The letter lays out the fundamentals of the opportunity for Health 2.0 companies to pursue a path of providing value-added Healthcare Advisory Services to their constituents:

Dear Grievance Department,

I am writing to file a “grievance” at the request of one of your representatives regarding your current medical reimbursement policy and its lack of transparency. I am a board-certified emergency medicine physician, a healthcare advocate, and an information technology entrepreneur. I am currently insured by your organization as part of the Preferred Provider Organization offering. I have been a long-time user of health savings accounts, and am interested in achieving the best value for my healthcare dollar.

Healthcare, as you know, is an extremely fragmented, impossible to navigate, and intensely frustrating industry for patients. Attempting to be a rational consumer in this industry is impossible as there is no information sharing to provide a foundation for making a choice. In nearly every situation, either the health plan, the provider, or the facility fails to provide the required information (cost and outcomes) from which to make a rational healthcare decision.

As a case in point, my son currently requires an outpatient ultrasound procedure. I have a choice between two local facilities in which to obtain the procedure. I have several factors to consider in making my healthcare choice including quality, convenience, and cost. In terms of quality, since it is a routine procedure, performed by certified ultrasonographers, and read by board certified radiologist, I have made the reasonable assumption that the test can be performed with equal precision at either facility. In terms of convenience, both facilities are within 10-15 minutes of my home and provided reasonable times in which to schedule the procedure.

In terms of cost, things immediately go non-linear. In questioning the radiology group, they can only give me a list price for their services (which include the setup, technician, and reading). However, they cannot tell me how much of that list price I am going to have to pay. In addition, they could not tell me what the facility charge would be. When I questioned them on this, they told me to call my health plan because, “there are about 50 different reimbursement schedules” and she had no way to understand at what rate I would be reimbursed for the facility charge.

The reason it is relevant in this case is that I know that you reimburse Facility 1 at 214% of Medicare and you reimburse Facility 2 at 433% of Medicare (remember these facilities are within 10 miles of each other). Even this information is incomplete because I don’t know if the fee schedule for both facilities is the same. So, with the little information I have, I can only assume that I am going to pay more than double the facility fee at one of the hospitals versus the other. Will this be $10, $100, or $1,000 different? I have no idea, there is no information, and therefore I cannot make a rational decision on how to spend my healthcare dollar.

It appears to me that you have many reason to want me to be a better consumer by providing me the type of information required to make a rational choice. When I am responsible for how I am spending my healthcare dollar (HSA), our interests become aligned in my effective spending of that money. When this alignment is coupled with pricing information that you can provide, it synergistically increases the possible cost savings. When coupled again with preventative healthcare measures and healthy choices (because I know I will be responsible for costs associated with bad choices), another round of savings can be achieved.

Of interest, self-interested decisions are not based solely on price, they are based on value (outcome/price). Therefore to provide an effective foundation for rational healthcare decision making, I believe that my healthplan should be required to post outcome information regarding procedures, therapies, and related interventions. If you are going to restrict me to stay within your contracted network of providers, I want to know that the providers you have aligned with are going to provide me an equivalent or better healthcare value then on some other provider. I may make the decision to spend more because I am more comfortable with a specific hospital, a specific physician, or for some other reason. I seems more than reasonable that consumers who partner with their health plans in this fashion will not only be more engaged in proactively taking care of themselves, but more satisfied with their health plan and enjoy a higher quality of care.

I have chosen to spend the time to write this letter to let you know that your current pricing policy of not providing information to me as a member of your plan is unacceptable, prevents rational decision making, and will not allow you to be competitive in the very near future. I am also writing to highlight the opportunity for your organization to become a value added healthcare advisory service organization in helping your members obtain the greatest healthcare value (outcome/price) for their money. By doing this, you should enjoy a healthier, more informed, more satisfied, and more loyal membership base. By not doing this, you will continued to be viewed as the main problem in the current healthcare system wide failure.

It is the opportunity to forge the type of partner relationship with your members referenced above that will allow you to remain competitive with the coming onslaught of the next generation of healthcare advisory services companies (Health 2.0). I look forward to the opportunity to speak with a grievance manager shortly regarding this matter.

2 comments on “Transparency and Rational Healthcare Decision Making

  1. Jack says:

    Re: Greivance: Well done! Please post any response you receive.

  2. DJS says:

    Nice long letter. Why do you think the insurance company cares about your business? You are a much smaller influence on their margin than the large mass of uninformed consumers and hospitals who thrive on this opacity.
    Reminds me of when I got a windshield replaced on an ols Chevy. The lady behind the counter was mystified when I got out my check book. “Oh, we’ll bill your insurance.” It’s a classic, I don’t have that kind of insurance, I’ll just pay cash. I’d called ahead and gotten an estimate. She scrolled down and said$500, three times the estimate. Suddenly a guy from a back office comes out, overheard the conversation and smiles and whispers in her ear and suddenly it’s $135.
    What evil we promote with dishonesty and guile. And doctors have been part of this charade for too long. Read “Healing the Wounds”, David Hilfiker.

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